4.28pm: The Australian dollar struggled to make much headway today, nursing losses a day after suffering its biggest fall in six weeks following a surprisingly large cut in interest rates.

The Aussie last traded at $US1.0339, having skidded nearly 1 per cent on Tuesday to a low of $US1.0304 after the RBA chopped its cash rate by 50 basis points to 3.75 percent.

The currency was slightly unsettled after NAB cut its mortgage rate by only 32 basis points, although it has been widely anticipated that banks will not fully pass on the 50 basis point official rate cut.

Investors assume the smaller the easing by the commercial banks the more the RBA might have to do.

4.21pm: Among the major sectors, materials gained 0.6 per cent but financials fell 0.3 per cent. Energy rose 0.7 per cent and consumer staples were up 0.5 per cent.

4.17pm: Amid all the NAB cut excitement, the market has closed, but without really budging much over the past few hours. The benchmark S&P/ASX200 index inched up 6.4 points, or 0.1 per cent, to 4435.9, while the broader All Ords gained 7.5 points, or 0.2 per cent, to 4504.8.

4.10pm: Cheeky tweet on NAB's cut:

NAB was always lowest ... but 6.99% has a K-Mart sound to it.Tilts balance towards a little to a follow up 25 in June...

4.03pm: Some more on NAB's rate cut, this time from the official release: “The European debt crisis is having an impact on the global and domestic economy,” says NAB Personal Banking group executive Lisa Gray.

“Decisions on lending rates are not taken lightly, but we are determined to provide our customers with certainty through our commitment to stay the lowest of the major banks for the rest of 2012.”

3.50pm: And here's the confirmation of the rate cut via Twitter:

We’ve just announced that we’re cutting our standard variable home loan rate from 7.31% to 6.99% p.a. ^AR

3.46pm: Looks like NAB is the first of the big four to move, shaving 32 basis points off its standard variable rate to 6.99 per cent. Just waiting for final confirmation from the bank.

3.43pm: UBS, Switzerland’s biggest bank, says first-quarter profit fell 54 per cent on a loss at the investment bank and an accounting charge related to the company’s own debt.

Net income fell to 827 million Swiss francs ($900 million) from 1.81 billion francs in the year-earlier period, the Zurich-based bank said today. Analysts were expecting net income of 810.9 million francs.

3.40pm: Financial officials from China, Japan and South Korea are discussing boosting co-operation in investment in each other's government bond markets, South Korean Deputy Finance Minister Choi Jong-ku said, without elaborating.

He was speaking after meeting officials from the neighbouring countries ahead of their talks with the 10 countries of the Association of Southeast Asian Nations (ASEAN) on the sidelines of the Asian Development Bank's annual meeting in Manila.

One source who attended some of today's meetings said the three countries were discussing managing investments in each other's bond markets in such a manner as to mitigate excessive fund flows at times of international market turbulence, Reuters says.

3.29pm: Billionaire miner Andrew Forrest says Fortescue will only pay between zero and $50 million under the government's mining tax over the next five years.

A vocal critic of the tax, Mr Forrest today stepped up claims the tax would raise a fraction of what the government expects, blasting forecasts that it will raise $10.6 billion as a ''charade''.

''I would say we will pay between zero and $50 million of MRRT some time in the next five years - I am not sure when it is and it will depend on iron ore prices. But will it raise the $10 billion? No,'' Mr Forrest said in Canberra.

3.12pm: Michael Pascoe has written a comment on the big bank rates debate that is stirring some controversy: High tide for bank whingers:

Like a king tide coinciding with a storm surge, the combination of record bank interim profits and their delay in announcing interest rate reductions that will be less than the RBA's cash rate cut means we're set to be flooded by whingers banging on about bank greed and mortgage burdens.

Inevitably led by politicians who pretend to know no better and whipped along by tabloid media that just don't know, the whingers' tide crests with every profit and interest rate announcement.

We enjoy the great benefits of a more-or-less free market system, a system that depends on making choices from time to time.

Actually, the local market is the region's worst performer today - but that could be because it was one of the few bourses open yesterday on May Day when it rallied.

2.51pm: China’s longest bear market since 2005 is ending as government efforts to bolster the economy spur a rally in stocks, say the strategists whose buy recommendations two years ago preceded a 34 per cent gain in the Shanghai Composite Index.

While the Communist Party cut its economic expansion target in March, Morgan Stanley Huaxin Securities and Guotai Junan Securities say growth is rebounding from the slowest pace since 2009 as policy makers ease lending curbs.

Value Investment Principals predicts stocks that benefit most from a buoyant economy will lead gains after they tumbled during the Shanghai Composite’s 423-day bear market. The retreat ranks as the second-longest since 1990, according to Birinyi Associates.

"We’re definitely going to have a major bull market ahead,” Jerry Lou, the chief strategy officer at Morgan Stanley Huaxin in Shanghai, says.

The Shanghai Composite has rallied 12 per cent from this year’s nadir on January 5 as reports on bank lending and manufacturing spurred investors to snap up shares trading at the cheapest levels on record. It's up 1.6 per cent today.

2.40pm: The market has recovered from its late morning slump and is now trading about 0.2 per cent higher, buoyed somewhat by China's HSBC final PMI reading, which came in above last week's prelimnary reading.

Among the sectors, materials are 0.5 per cent higher, while financials have dropped 0.2 per cent. BHP and Rio are up 0.7 and 0.9 per cent respectively, but all the big banks are trading lower.

ANZ is leading the losses, falling 0.9 per cent after its half-year earnings came in slightly below expectations.

2.36pm: US based medical device developer Osprey Medical has started trading on the ASX at a premium to its listing price.

Osprey shares opened at 42 cents, two cents above the issue price, and was still at 42 cents in afternoon trade. Osprey raised $20 million through an initial public offer of 50 million CHESS depository Interests to investors.

2.27pm: The latest data from Credit Suisse shows the probability of a 25-basis-point rate cut when the RBA meets on June 6 is a 57 per cent chance. The data also shows a further 69 basis points of cuts is expected over the next 12 months.

2.18pm: Asian markets are higher after the strong manufacturing data from the United States and China boosted optimism over the state of the world's two biggest economies.

Hong Kong is 0.90 per cent higher, Shanghai has risen 0.88 per cent, Seoul is up 0.67 per cent and Tokyo is virtually unchanged by the break.

2.11pm: Australia is likely to overshoot significantly its "20 per cent by 2020" renewable energy target according to Origin Energy, adding to rising electricity costs.

Origin, Australia's largest electricity retailer, says falling electricity demand and increasing spread of rooftop solar and solar hot water systems means the country is likely to require only 250 terawatt-hours (TWh) of energy in 2020.

2.05pm: Woodside Petroleum, Australia's largest oil and gas company, says a wide range of investors is interested in buying a $7 billion stake in the company that Royal Dutch Shell is looking to sell.

Woodside buying the 24 per cent stake Shell holds is "not the best option" right now, Woodside chief executive told reporters at the company's annual meeting.

1.57pm: As e-commerce, and technology generally, continues grabbing the headlines, the imagination of shoppers, and retail market share, a lot of retail industry gurus have reached consensus about what store-based retailers and shopping centre operators need to do to shore up their relevance, Michael Baker writes.

It's to offer a superior shopping experience.

The question is, why are so many retailers still sitting on the fence and not making the badly needed investments in their stores?

1.41pm: Insurance Australia Group says it is looking to enter the Indonesian market, as Australia's largest home and car insurer seeks to expand its footprint in faster-growing Asian markets.

"We have completed a detailed strategic review of the Indonesian market and we believe it represents a very strong opportunity and there is the added appeal of being able to own up to 80 per cent," Mike Wilkins Chief Executive Officer IAG said in notes for a speech to a business audience.

Asia is growing in importance for IAG, which aims to for the region to reach 10 per cent of group revenue over the next four years.

The insurer has operations in India, Thailand, Malaysia, China and its most recent move into Vietnam with a 30 per cent stake in motor insurer AAA.

1.19pm: Markets are mounting a comeback. Stocks now 0.2 per cent higher after threatening to fall into the red.

1.10pm: Some news from Andrew Forrest's appearance at the National Press Club today. He says Fortescue will pay betweenzero and $50 million over the next five years under the Australian government's mining super profits tax. The government expects to raise $10.6b in the first three years.

12.55pm: A recap of some of today’s gainers:

Brambles climbed 3 per cent to $7.47, the most since March, after the world’s biggest supplier of wooden pallets reaffirmed its profit forecast for 2012 and said nine- month sales rose 33 per cent from a year earlier

Macmahon Holdings gained 3.52 per cent to 73.25 cents as the mining and construction company said it was on track for full-year profit of between $55 million to $60 million

Stockland gained 1.8 per cent to $3.175 as Credit Suisse Group upgraded its recommendation on shares of the property trust to “outperform” from “neutral” after yesterday’s earnings report

12.45pm: The Australian dollar has edged higher following a drop a hefty fall yesterday in response to a rate cut decision by the central bank. It was recently buying $US1.0342, up from $US1.0324 late yesterday.

Nomura head of foreign exchange Kurt Magnus said the rebound from Tuesday’s fall showed the resilience of the Australian dollar as an attractive currency for European investors.

‘‘Last night is a classic example of what’s going to happen with the Australian dollar in 2012,’’ he said. ‘‘There’s a continued movement of money from Europe into high-yielding Asia. Every single dip is an opportunity to invest.’’

This trend meant the local currency was able to withstand concerns around global growth as well as any negative developments in domestic markets.

‘‘The lowest New York close in the Australian dollar this year has been $US1.0228. Look at what we’ve had thrown at it - Greece, Spain, concerns around China’s growth, and then a 50 basis point (official interest rate) cut. I think we are going to have to get used to a higher Aussie for a lot longer.’’

12.40pm: China's manufacturing sector shrank for the sixth month running in April, according to a survey that showed a continued divergence between China's larger, predominantly state-owned enterprises and smaller, private firms.

The HSBC China Purchasing Managers' Index, geared to smaller firms, improved to 49.3 in April from 48.3 in March, but remained below the threshold of 50 that divides expansion from contraction. Still, it showed that the rate of deterioration had slowed following a difficult first quarter when economic growth hit its slowest pace in nearly three years.

12.39pm: Sorry for that break in transmission but we're back.

12.01pm: APN News and Media says its New Zealand media properties are under strategic review and has flagged a fall in first-half net profit.

APN chief executive Brett Chenoweth says the media company has engaged Deutsche Bank to advise it on the various options available to "maximize profitability and value for shareholders".

"In recent months, APN has identified a number of opportunities and at the same time received approaches in relation to potential transactions involving some or all of our New Zealand assets," Mr Chenoweth told the company's annual general meeting in Sydney.

11.54am: Telstra is in a better position to exploit the national broadband network than other carriers because of its national retail presence and experience connecting 10,000 Brisbane households to fibre-optic cables, chief executive David Thodey says.

And Telstra's future growth would come from selling media, applications and services on fixed and mobile broadband networks, and expanding into Asia. He did not say what opportunities Telstra was looking at in Asia.

11.45am: Staying in the region, China shares have opened 1 per cent higher after the country's securities regulator said it would reduce transaction fees for trades on the Shanghai and Shenzhen stock exchanges in the latest in a series of market reforms.

The China Securities Regulatory Commistion said on Monday it would reduce transactions fees collected by both the stock exchanges and the official clearing house starting June 1.

It estimates the combined impact will be 3 billion yuan ($475.42 million) less fees collected in a year, a reduction of 25 per cent.

The Shanghai Composite Index opened at 2421.1 points, compared with 2396.3 points at the close last Friday. It was closed on Monday and Tuesday for public holidays.

11.37am: Tokyo stocks have opened 0.5 per cent higher after the US dollar climbed back above the key 80 yen level following positive US manufacturing data.

The Nikkei 225 index at the Tokyo Stock Exchange is up 46.92 points at 9397.87 after the better-than-expected read on US manufacturing in April and encouraging construction data drove Wall Street higher.

11.30am: After briefly dipping into negative territory, the market is edging higher. The ASX200 is up just 6.1 points, or 0.1 per cent, at 4435.6. That's some way off the expected gains futures were indicating a few hours ago.

11.20am: More on Origin. Managing director Grant King, who spoke this morning at the Macquarie Australia conference in Sydney, said the 10-year deal, starting in 2015, would deliver significant value, ‘‘opening an export channel to market for our legacy fuel reserves and allowing a more rapid monetisation of the resource in line with international oil-linked pricing’’.

11.12am: Origin shares are 0.9 per cent higher, or 12 cents, to $13.63.

11.06am: Australia's Origin Energy Ltd said on Wednesday it has signed a deal to supply gas its Gladstone liquified natural gas project partners for 10 years starting in 2015.

Under the deal, Origin will supply GLNG with 365 petajoules (PJ) of gas or 100 terajoules per day from its reserves in Australia's eastern states, including Queensland where Gladstone is located.

10.58am: Shares in APA Group, whose pipelines carry more than half of Australia’s natural gas, have fallen heavily after its largest shareholder, Petroliam Nasional, sold its entire stake in the company.

APA declined as much as 7.5 percent to $4.79, the most since June 24, 2012.

Petronas, as the Malaysian state oil company is known, sold a 17.3 percent stake, or 111.3 million shares, to institutional investors, APA said today in a statement.

10.51am: Markets are now edging back toward negative territory. Macquarie Private Wealth division director Lucinda Chan said the strong finish to Tuesday’s local session in response to the RBA’s rate cut was expected to curb gains today.

‘‘It was a big run yesterday afternoon, so I think we have to be realistic to think that our market needs to balance itself out a little bit,’’ Ms Chan said.

10.42am: Alumina says pricing and demand will remain subdued in 2012, as the high Australian dollar continues to put the company under pressure. Addressing shareholders at Alumina’s annual general meeting in Melbourne, chief executive John Bevan spoke cautiously about the short-term outlook.

‘‘2012 has started with weak pricing and an uncertain market, due to the macroeconomic outlook for Europe,’’ he said. Aluminium demand growth looks to be up by five to seven per cent in 2012 due mainly to China, but slower than in 2011, he said.

The company’s costs have risen significantly because of the strength of the Australian dollar. The impact of an emissions trading scheme was hard to forecast, he added.

10.39am: Despite markets being higher, if only slightly, bank stocks are lower after ANZ said income was heavily impacted by a 13 basis point fall in margins in its Australian operations:

CBA is 0.45% lower to $52.61

ANZ is 1.21% lower to $23.70

NAB is 0.08% lower to $25.19

Westpac is 0.74% lower to $22.66

10.33am: ANZ shares have slipped further. They're now 1.2 per cent lower to $23.70 after today announcing an almost $3 billion first-half profit. For analysis of the result, check this piece by banking writer Eric Johnston.

10.30am: To some of the early sliders on the ASX200:

APA Group - down 6.76%

Ramelius Resources - down 5.17%

JB Hi Fi - down 2.51%

Bank of Queensland - down 2.2%

Reject Shop - down 2.11%

10.26am: Other companies performing well on the ASX200 include:

Macmahon Holdings - up 3.52%

Treasury Wine Estates - up 3.37%

Stockland - up 2.56%

Mesoblast - up 2.13%

CSL - up 2%

QR National - up 1.93%

10.23am: Both the All Ords and the ASX200 have pared early gains - both now 0.1 per cent higher, down from gains above 0.3 per cent.

10.16am: Looking at how the various sub indices on the ASX200 are performing:

Health - up 1.03%

Materials - up 0.74%

Energy - up 0.59%

Industrials - up 0.58%

Info tech - up 0.37%

Consumer staples - up 0.31%

Telecoms - down 0.53%

Utilities - down 1.6%

10.12am: In early trade, the All Ordinaries index is 15.6 points higher, or 0.3 per cent, to 4512.9, while the benchmark S&P/ASX200 is 16.2 points higher, or 0.4 per cent, to 4445.7.

10.06am: ANZ shares are down 0.8 per cent, or 20 cents, to $23.79.

9.57am: Australian bond futures prices have opened slightly softer on US market movements.

At 8.30am the June 10-year bond futures contract was trading at 96.455 (implying a yield of 3.545 per cent), down from 96.510 (implying a yield of 3.490 per cent) on Tuesday. The June three-year bond futures contract was at 97.140 (2.860 per cent), down from 97.190 (2.810 per cent).

ANZ senior rates strategist Tony Morriss said there had been an adjustment in markets since their rise on Tuesday afternoon, following the Reserve bank of Australia’s cutting of the cash rate by 50 basis points to 3.75 per cent.

The Reserve Bank had been widely expected to cut the official interest rate by 25 basis points.‘‘The bond market rallied after the surprise decision by the Reserve Bank, but it gave some of that away overnight,’’ he said.

9.53am: Brambles says it is on track to meet its full year profit target after unveiling a 33 per cent rise in its latest sales results.

The world’s biggest pallet supplier said total sales from continuing operations rose by a third to hit $3.56 billion in the nine months to the end of March, compared to the previous corresponding period.

On a pro forma basis, which assumes Brambles had owned businesses it acquired since July 2010 for the entire corresponding period, sales were up by 7.0 per cent.

9.47am: Looking at this morning's ANZ's profit announcement, banking reporter Eric Johnston writes that borrowers, who are waiting to see how much of yesterday's rate cut is passed on, might not like what they see. He writes:

ANZ Australian retail bank managed to return profit growth of just 1 per cent to $1.36 billion over the first half last year. Significantly profit went backwards by 7 per cent compared to the September half.

Net interest margins – a key driver of profit – were crunched by 15 basis points on the March half, spurring on a drop in revenue.

For ANZ mortgage customers the signs don’t get any better, with the bank declaring the round of out-of-cycle interest rate rises pushed through late last year simply wasn’t enough to offset the fall in margin.

9.43am: Also in news today, Optus will cut 750 jobs over the coming months in a major restructure designed to boost profitability and improve customer service.

The company said the job retrenchments will come "from senior and middle management as well as operations, back office and support functions." The company expects a $37 million one-off charge.

9.41am: Some analyst rating changes for today:

Woodside Petroleum raised to 'neutral' at JPMorgan

Caltex Australia cut to 'underperform' at BofA-Merrill Lynch

AWE upgraded to 'buy' from neutral at Citigroup

Jetset Travelworld cut to 'hold' at RBS

9.38am: US markets rose overnight on better-than-expected manufacturing data from April. The Institute for Supply Management's factory index climbed to 54.8 last month, exceeding the most optimistic forecast in a Bloomberg News survey and the best reading since June, group's report showed. Readings greater than 50 signal growth.

Wall Street closed about half a per cent higher on the news. Most European markets were closed for the May Day holiday.

The cash result, which strips out one-offs and investment losses or gains, rose 5 per cent to a record $2.973 billion, close the level expected by analysts in a Reuters survey.

The net profit for the half, though, rose 10 per cent from a year earlier to $2.92 billion, slightly less than analysts had expected.

9.32am: Australian shares are pointed close to half a per cent higher a day after the RBA delivered a super-sized rate cut. For a comprehensive look at this morning's business news check today's need2know and the business press digest. Meantime, here are this morning's key markets links: